Easier for SMEs to get access to credit

A SENIOR Chinese central bank official yesterday said financing conditions had improved for small and medium-sized enterprises in recent months, reflecting government moves to increase their access to loans.

Yi Gang, vice governor of the People's Bank of China, cited a record increase in total loans and a surge in the amount of commercial paper, which is often used or held by SMEs.

"Many small and medium-sized enterprises probably secured more loans from commercial banks, as total loans made in the first 10 months reached a record high of 3.66 trillion yuan," Yi told a press conference in Beijing. The amount he mentioned is equivalent to US$535.9 billion.

Yi pointed out that the central bank in August raised this year's credit quota by 5 percent for national commercial banks and 10 percent for local commercial banks. The move was aimed at easing the financial difficulties of SMEs.

Central bank data showed that commercial paper increased by 60.8 billion yuan last month, the largest rise ever. That gain was 15 percent more than the climb of 52.8 billion yuan recorded in August. The figure for September was not in the central bank reports on its Website.

It is often difficult for SMEs to borrow from commercial banks, and many SMEs have struggled since last year amid the credit squeeze that developed as a result of the central bank's previous tight money policies.